The 30% federal solar tax credit, explained

The federal Residential Clean Energy Credit was the single best number in U.S. solar economics — a flat 30% off qualified costs. It applies to systems installed through the end of 2025, and the IRS is explicit that it does not cover property placed in service after December 31, 2025. This guide is the whole rule, verified against the IRS page.

The short version

• The credit is 30% of qualified costs for systems installed from 2022 through December 31, 2025.
• Per the IRS, the credit is not available for property placed in service after December 31, 2025 — so a rooftop commissioned in 2026 does not qualify.
• The credit is nonrefundable: it offsets tax you owe, and any unused amount carries forward to future tax years.
• Claimed on Form 5695 with the return for the year the system was installed — not the year it was purchased.

What the IRS page says, verbatim

“The Residential Clean Energy Credit equals 30% of the costs of new, qualified clean energy property for your home, installed anytime from 2022 through December 31, 2025. The credit is not available for any property placed in service after December 31, 2025.”

— IRS, “Residential Clean Energy Credit”, irs.gov/credits-deductions/residential-clean-energy-credit — accessed 2026-08-08.

Who can claim it (for installations that still qualify)

• Improvements to your main home — owned or rented, new or existing, located in the United States.
• Certain improvements to a second home in the U.S. that you live in part-time and do not rent to others (fuel cell property is excluded there).
• Not available if you are a landlord or owner who does not live in the home.

What counts as a qualified cost

• Solar panels, inverters, mounting equipment, and labor: onsite preparation, assembly, original installation, piping and wiring.
• Solar roofing tiles and solar shingles qualify because they generate clean energy — roof trusses and traditional shingles do not.
• Battery storage with at least 3 kWh of capacity, purchased on its own or with the system.
• Subtract subsidies, rebates and other incentive payments from the base before calculating the credit.

The credit has no annual or lifetime dollar limit (fuel cell property has separate caps). Because the federal credit now sits in the past, state incentives and export-credit rules carry more of the weight — each state guide lists what is actually on offer, and the payback estimator runs its numbers without assuming a federal credit.

Sources

1. IRS — “Residential Clean Energy Credit” — irs.gov/credits-deductions/residential-clean-energy-credit — accessed 2026-08-08 (quoted verbatim above).